Sparks fly in developers' meeting with officials over anti-speculation taxes

Private developers are threatening to stop redevelopment projects, claiming the government's new anti-property speculation taxes will render property acquisition unprofitable.

In strongly worded comments after a highly charged meeting with Transport and Housing Bureau officials yesterday in a bid to force the government to ease the measures, the developers expressed "extreme regret" over the new taxes and criticised the officials for being "ignorant" about how the property sector works.

"The officials did not seem to know about redevelopment," said Stewart Leung, chairman of the Real Estate Developers Association, after the meeting.

"I simply told them they were too ignorant," he said.

The association wants the new buyer's stamp duty - introduced in late October, under which overseas or corporate buyers of local properties have to pay 15 per cent of the transaction price as tax - to be dropped, or for local firms to be exempted.

They claim the tax jacks up costs for acquisition of properties for redevelopment.

But the government stood firm on the issue, saying that any exemption could create loopholes for non-locals to speculate on property through local companies.

Deputy Secretary for Transport and Housing Agnes Wong Tin-yu said the government explained details of future implementation of the buyers' stamp duty during the meeting.

She said the tax would be refunded to developers who can produce the government's consent of redevelopment within six years of completing the acquisition, adding that the government would adjust the stamp duty rates based on prevailing market conditions when necessary.

But Leung argued: "We told them it won't work and the government will have to do [redevelopment] itself. No developer would be interested in doing redevelopment any more ... [It] takes a long time and involves many companies and lengthy discussion with owners."

An association member, who declined to be named, said of the tense atmosphere at the meeting: "We were angry and kept questioning the officials what loopholes they were concerned about. I don't think we will have another meeting with the government."

Leung quoted officials as saying that they were willing to listen and asking the association to submit more views. He said the association planned to submit another paper to the government after the holidays.

Developers have been up in arms over the government's extension of anti-property speculation taxes since they were announced in late October.

In a statement last night, the Transport and Housing Bureau reiterated that the new tax was in line with the policy to place higher priority in meeting local people's housing needs.